My talk for a conference on Emergent Risk at Princeton in 2012. The paper discusses notions of stability and robustness in networks, with applications to the world trade web.
Virus merupakan partikel aseluler yang bersifat parasit dan berukuran sangat kecil yang hanya dapat bereplikasi di dalam sel inang. Virus menyebabkan berbagai penyakit pada tumbuhan, hewan, dan manusia.
The document discusses common pitfalls in popular risk analysis methodologies. It identifies mistakes in risk identification and quantification, such as characterizing risks as continuous when they are discrete, or vice versa. It also discusses errors in modeling below-the-line risks, combining triangular distributions, and misunderstanding the meaning of "confidence" in estimates. The document aims to explain these issues and their potential effects on misleading management with inaccurate risk analyses.
The document summarizes key concepts around supply chain risk management. It discusses how globalization has increased supply chain complexity and vulnerability. Supply chain risks can come from various sources and be internal or external to the supply chain. Different frameworks categorize risks by impact/likelihood, or by source within the organization, network, or environment. Managing risks requires understanding potential consequences and proactively preparing for both common and rare disruptive events.
This document discusses a model for analyzing how network connectivity impacts asset returns and risks. The model augments a traditional multi-factor model to account for systemic links between assets represented by a network connectivity matrix. The model shows that network links inflate asset loadings to common factors, impacting expected returns and total risk decomposition into systematic and idiosyncratic components. Greater network connectivity reduces diversification benefits by slowing the decrease in portfolio idiosyncratic risk as the number of assets increases. The authors propose extending the model to incorporate heterogeneous asset responses to links and time-varying network structures.
Existential Risk Prevention as Global PriorityKarlos Svoboda
ย
This document discusses existential risk, which is defined as risks that could cause human extinction or permanently and drastically curtail the potential of humanity. The author makes the case that existential risk reduction should be a top global priority for the following reasons:
1) Even small reductions in existential risk have enormous expected value due to the astronomical potential for future human life and development.
2) The largest existential risks are anthropogenic and linked to potential future technologies like advanced biotech, nanotech, and AI.
3) A moral argument can be made that existential risk reduction is more important than any other global issue due to the infinite value of the future of humanity.
4) Efforts should
Who Watches the Watchers? Metrics for Security StrategyKenna
ย
Security metrics are often about the performance of information security professionalsโtraditional ones are centered around vulnerability close rates, timelines, or criticality ratings. But how does one measure if those metrics are the right ones?
In this presentation, Sr. Data Scientist Michael Roytman at Kenna takes an indepth look at how to evaluate your security metrics program for risk reduction.
Specifically, his presentation includes:
- What makes a security metric, good
- Applying your collected data towards building a successful security metrics program
- Using security metrics to automate how you manage and monitor risk exposure
Take a look at this presentation to evaluate your organizationโs existing security metrics program, and learn how you can build a security metrics strategy that measures your overall impact to risk reduction.
Presentation of seminar paper on Empirical Approaches on Systemic Risk and Financial Contagion. This is a Masters course at the Department of Economics, University of Bamberg. Topics include network structures, notions of too-big-to-fail and recent proposals of strengthening the banking sector.
Virus merupakan partikel aseluler yang bersifat parasit dan berukuran sangat kecil yang hanya dapat bereplikasi di dalam sel inang. Virus menyebabkan berbagai penyakit pada tumbuhan, hewan, dan manusia.
The document discusses common pitfalls in popular risk analysis methodologies. It identifies mistakes in risk identification and quantification, such as characterizing risks as continuous when they are discrete, or vice versa. It also discusses errors in modeling below-the-line risks, combining triangular distributions, and misunderstanding the meaning of "confidence" in estimates. The document aims to explain these issues and their potential effects on misleading management with inaccurate risk analyses.
The document summarizes key concepts around supply chain risk management. It discusses how globalization has increased supply chain complexity and vulnerability. Supply chain risks can come from various sources and be internal or external to the supply chain. Different frameworks categorize risks by impact/likelihood, or by source within the organization, network, or environment. Managing risks requires understanding potential consequences and proactively preparing for both common and rare disruptive events.
This document discusses a model for analyzing how network connectivity impacts asset returns and risks. The model augments a traditional multi-factor model to account for systemic links between assets represented by a network connectivity matrix. The model shows that network links inflate asset loadings to common factors, impacting expected returns and total risk decomposition into systematic and idiosyncratic components. Greater network connectivity reduces diversification benefits by slowing the decrease in portfolio idiosyncratic risk as the number of assets increases. The authors propose extending the model to incorporate heterogeneous asset responses to links and time-varying network structures.
Existential Risk Prevention as Global PriorityKarlos Svoboda
ย
This document discusses existential risk, which is defined as risks that could cause human extinction or permanently and drastically curtail the potential of humanity. The author makes the case that existential risk reduction should be a top global priority for the following reasons:
1) Even small reductions in existential risk have enormous expected value due to the astronomical potential for future human life and development.
2) The largest existential risks are anthropogenic and linked to potential future technologies like advanced biotech, nanotech, and AI.
3) A moral argument can be made that existential risk reduction is more important than any other global issue due to the infinite value of the future of humanity.
4) Efforts should
Who Watches the Watchers? Metrics for Security StrategyKenna
ย
Security metrics are often about the performance of information security professionalsโtraditional ones are centered around vulnerability close rates, timelines, or criticality ratings. But how does one measure if those metrics are the right ones?
In this presentation, Sr. Data Scientist Michael Roytman at Kenna takes an indepth look at how to evaluate your security metrics program for risk reduction.
Specifically, his presentation includes:
- What makes a security metric, good
- Applying your collected data towards building a successful security metrics program
- Using security metrics to automate how you manage and monitor risk exposure
Take a look at this presentation to evaluate your organizationโs existing security metrics program, and learn how you can build a security metrics strategy that measures your overall impact to risk reduction.
Presentation of seminar paper on Empirical Approaches on Systemic Risk and Financial Contagion. This is a Masters course at the Department of Economics, University of Bamberg. Topics include network structures, notions of too-big-to-fail and recent proposals of strengthening the banking sector.
HOW REVERSIBILITY DIFFERENTIATES CYBER FROM KINETIC WARFARE: A CASE STUDY IN ...ijsptm
ย
A pair of attacks on energy sector assets offers a unique opportunity to better understand the differences in
impact from cyber and kinetic warfare. A review of the 2021 cyber attack on Colonial Pipeline and the
missile strike on the Syvash wind farm demonstrates the principle of reversibility in action, particularly in
regard to the short-lived nature of cyber attacks. Within the context of security and strategy, particularly at
the cyber/energy security nexus, this means that traditional state security thinking needs to evolve to
address threats in the cyber domain rather than try to retrofit dated strategies. The two cases compared
offer lessons that can be applied more broadly in the formation of state-level cyber and energy strategic
thinking, ultimately improving resilience and the appropriateness of protection.
This document summarizes a presentation about transmission security and failures in large systems. It discusses how the 9/11 Commission identified four kinds of failures that contributed to the 9/11 attacks. It also notes that while security has always been a priority for the electricity sector, it is an even greater priority now. The document warns that the likelihood of hidden failures increases as the number of components in a large system increases.
This document summarizes a study assessing the cyber risk to transportation industrial control systems. The study involved auditing a bridge tunnel control system to understand vulnerabilities. Researchers modeled a "Stuxnet-style" cyber attack scenario involving infecting the control system with malware via USB drive. They developed an event tree to estimate the likelihood of such an attack succeeding. They then simulated the attack's effects in a transportation model to analyze regional impact. The study helped raise awareness of cyber risks with operators and leaders. More such assessments are needed to further understanding of vulnerabilities.
1) Human communities will always be at risk from natural and human-made disasters due to factors like geography and technology that can enable threats. 2) Major cities like New York and New Orleans are especially vulnerable due to their locations and infrastructure. 3) Rapid urbanization and population growth will exacerbate risks in the coming decades as more people and structures are exposed to hazards.
Interconnectedness amongst financial institutions has been implicated as a significant contributing factor to the 2008-09 crisis, where shocks were amplified to becoming systemic events. We study two types of networks: correlation network based on publicly traded bank returns, and a physical network based on interbank lending transactions and discuss various analytic approaches for studying their connectivity patterns over time. Some key findings include: (i) both networks behave similarly pin the period preceding the 2008-09 crisis, (ii) during the crisis the correlation network shows an increase in interconnectedness while the physical network highlights a marked decrease in interconnectedness. Moreover, these networks respond differently to monetary and macroeconomic shocks. Physical networks forecast liquidity problems, while correlation networks forecast financial crises.
The document discusses risk analysis for fires in civil structures. It covers defining the system, hazard identification, probability analysis, consequence analysis, risk estimation, risk evaluation, and risk reduction. Key points include defining the scope and context of the risk assessment, identifying potential hazards and how they may occur, and analyzing the probability and consequences of hazards to estimate risk and determine if risk levels are acceptable or if risk reduction is needed.
This whitepaper discusses next generation financial risk monitoring using a framework called Datashop Alchemy. It summarizes an approach to measuring systemic risk using interconnectedness between financial institutions and their credit ratings. The framework evaluates daily systemic risk scores using this methodology and visualizes the results. It is intended to help central banks, financial institutions, and other industries monitor systemic risk in their networks to identify risks and support decision making.
Capstone Final Draft Rev 2 - The Cyber-Security Dilemma_ The โCyber-Armyโ Bui...James Creamer III
ย
This document provides a summary of a paper analyzing the cyber security dilemma between the United States and China. It begins with an introduction outlining increased cyber attacks and the resulting buildup of cyber capabilities in the US and China. It then provides definitions of key terms and reviews relevant literature on the modern security dilemma with China, US-China relations, and cyber security. The literature discusses factors that can exacerbate or alleviate security dilemmas and different viewpoints on China's rise and the threat it poses. The document aims to determine if the US and China are justified in their reactions or if their actions are contributing to an escalating cyber security dilemma.
Differentiated social risk Rebound dynamics and sustainability performance in...Sandy Worden
ย
This document discusses differentiated social risk and sustainability performance in the mining industry. It argues that the mining industry currently conflates risk to people with risk to projects, without clearly differentiating the two. The document demonstrates the concept of "rebound dynamics", where social risks can generate impacts across institutions and boundaries. It asserts that understanding how social and business risks interact dynamically is important for ensuring the industry addresses social harms as part of its sustainability commitments. The document provides context on social science perspectives of risk, and how these differ from technical approaches used in the mining industry. It also explores how the concept of "social license to operate" has connected sustainability to risk discussions in the industry.
Whose Global Pulse: Diagnosing Sickness or Health?Global Pulse
ย
Presentation by Wim Naudรฉ of UNU-WIDER addressing issues of vulnerability and resilience at the United Nations Global Pulse Data and Analytics Workshop in Tarrytown, USA, 8-10 September 2010.
The document discusses increasing risks from chemical, biological, radiological, and nuclear disasters due to factors like globalization, increased mobility, and infrastructure vulnerabilities. While counterterrorism efforts have strengthened defenses against deliberate attacks, society remains unprepared for unintentional or "behind the lines" threats. A new approach is needed that reallocates resources to train and involve the general population in prevention, response, and building resilience.
The document discusses using an epidemic simulation model called CASMIM (Cellular Automata with Social Mirror Identity Model) to better model real-world epidemics and evaluate public health policies. CASMIM uses a social mirror identity concept where each individual is represented by multiple identities to model their movement and interactions. It was found to generate small-world network structures similar to human social networks and allow sensitivity analysis of factors like population size, individual diversity, and neighborhood type.
This document summarizes a book titled "Measuring Vulnerability to Natural Hazards: Towards Disaster Resilient Societies" edited by Jรถrn Birkmann. The summary discusses key themes of the book, which include the need to clearly define concepts like vulnerability and risk, the complexity of measuring vulnerability, and issues with indicator selection and data availability. Specifically, the book examines different approaches to measuring vulnerability at global, national and local levels. It also explores the use of indicators and models to assess vulnerability, finding that no single model exists due to varying definitions and the multifaceted nature of vulnerability itself.
1) The document discusses systemic risks and emerging future challenges, including issues like complexity, cascading consequences, climate change, and digital insecurity.
2) It argues that participatory democracy and human rights are key to reducing disaster risks but that inequality can undermine efforts if human rights are not upheld.
3) Looking ahead, the document stresses that foresight, planning, and clear communication according to established quality standards will be crucial for success in addressing future disasters and challenges in a rapidly changing world.
WORK & STRESS, 1998, VOL. 12, NO. 3 293-306 Achieving a sa.docxambersalomon88660
ย
WORK & STRESS, 1998, VOL. 12, NO. 3 293-306
Achieving a safe culture: theory and practice
JAMES R E A S O N
Department of Psychology, University of Manchester, Manchester M13 9PL, UK
Keywords: Safety culture; Accidents; Organizational factors; H u m a n error.
This paper discusses four topics relating to safety culture, three theoretical and one practical. The first
considers why it is that an unsafe culture is more likely to be involved in the causation of organizational
rather than individual accidents. It is the pervasive nature of culture that makes it uniquely suitable
for creating and sustaining the co-linear gaps in defences-in-depth through which an accident
trajectory has to pass. The second topic relates to pathological adaptations, and discusses two
examples: the Royal Navy of the mid-nineteenth century and the Chernobyl reactor complex. The
third issue deals with recurrent accident patterns and considers the role of cultural drivers in creating
typical accidents. The final topic is concerned with the practical question of whether a safety culture
can be engineered. It is argued that a safe culture is an informed culture and this, in turn, depends upon
creating an effective reporting culture that is underpinned by a just culture in which the line between
acceptable and unacceptable behaviour is clearly drawn and understood.
1. Introduction
Although there is no universally accepted definition of safety culture, there can be little
doubt that it is a concept whose time has come. Since the beginning of 1997, there have been
well-attended meetings and workshops devoted exclusively to this topic, and the interest
extends across many work domains. For example, the US National Transportation Safety
Boardโs (NTSB) symposium on โ Corporate Culture and Transportation Safety โ in April
1997 attracted some 550 delegates from all of its constituencies : aviation, railroads,
highways, the marine world, pipelines and the safety of hazardous materials. The
symposium was convened because the NTSBโs accident investigators were increasingly
conscious of the crucial role played by cultural factors in creating bad events (see, for
example, NTSB/AAR 1994, 1997, NTSB/RAR 1996).
The high level of concern with organizational culture in the world of hazardous
technologies poses both a challenge and an opportunity for those academics involved in the
safety-related sciences. W e need to develop a clearer theoretical understanding of these
organizational issues to create a principled basis for more effective culture-enhancing
practices. To this end, the paper presents arguments dealing with four culture-related issues,
three largely theoretical and one with more directly practical applications.
First, are modern, high-tech, well-defended technologies-such as nuclear power plants,
chemical process plants and commercial aviation-more vulnerable to the effects of a poor
safety culture than traditional industries involv.
The document discusses supply chain risk. It defines supply chain risk and identifies various types of risks including supply risks, demand risks, and environmental risks. It also discusses strategies for managing supply chain risk such as avoidance, postponement, hedging, control, and risk transfer. Effective supply chain risk management involves understanding risk sources and drivers, identifying critical parts of the supply chain, establishing contingency plans, and working collaboratively with suppliers and customers.
This document discusses managing risk in complex project environments. It begins by explaining that projects exist within complex financial, environmental, technological and political systems. It then discusses reframing how we view reality and risk when dealing with complexity and ambiguity. It also explains the duality of risk in terms of reward and regret from different stakeholder perspectives. The document then provides methods for managing risk, such as assumptions analysis and understanding interdependencies between risks. It advocates adapting project management approaches to account for complexity rather than relying only on past trends and data from less complex environments.
This document discusses cascading disasters and critical infrastructure. It begins with an overview of cascading disasters as events with primary impacts that lead to secondary impacts through interconnected vulnerabilities and escalation points. The document then discusses critical infrastructure and how the failure of critical systems like power, water, and communications can cascade and impact other sectors. It emphasizes that cascading disasters involve long chains of consequences and that risk analysis should consider escalation points and worst-case scenarios. The goal is to understand these complex events in order to enhance resilience and protection of critical infrastructure.
Financial Network Analysis and Visualisation - Seminar at NYU/Stern 5 April 2011Kimmo Soramaki
ย
This document provides a summary of a presentation on financial network analysis and visualization. It discusses growing interest in analyzing networks in economics and finance to better understand systemic risk. Network theory views financial entities as interconnected through balance sheets rather than being isolated nodes. Measuring the centrality of nodes in payment networks and lending markets can help identify systemically important financial institutions. The presentation promotes a new open source software tool called Financial Network Analysis that integrates data analysis, network visualization, and modeling to advance the study of systemic risk and contagion in financial networks.
More Related Content
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HOW REVERSIBILITY DIFFERENTIATES CYBER FROM KINETIC WARFARE: A CASE STUDY IN ...ijsptm
ย
A pair of attacks on energy sector assets offers a unique opportunity to better understand the differences in
impact from cyber and kinetic warfare. A review of the 2021 cyber attack on Colonial Pipeline and the
missile strike on the Syvash wind farm demonstrates the principle of reversibility in action, particularly in
regard to the short-lived nature of cyber attacks. Within the context of security and strategy, particularly at
the cyber/energy security nexus, this means that traditional state security thinking needs to evolve to
address threats in the cyber domain rather than try to retrofit dated strategies. The two cases compared
offer lessons that can be applied more broadly in the formation of state-level cyber and energy strategic
thinking, ultimately improving resilience and the appropriateness of protection.
This document summarizes a presentation about transmission security and failures in large systems. It discusses how the 9/11 Commission identified four kinds of failures that contributed to the 9/11 attacks. It also notes that while security has always been a priority for the electricity sector, it is an even greater priority now. The document warns that the likelihood of hidden failures increases as the number of components in a large system increases.
This document summarizes a study assessing the cyber risk to transportation industrial control systems. The study involved auditing a bridge tunnel control system to understand vulnerabilities. Researchers modeled a "Stuxnet-style" cyber attack scenario involving infecting the control system with malware via USB drive. They developed an event tree to estimate the likelihood of such an attack succeeding. They then simulated the attack's effects in a transportation model to analyze regional impact. The study helped raise awareness of cyber risks with operators and leaders. More such assessments are needed to further understanding of vulnerabilities.
1) Human communities will always be at risk from natural and human-made disasters due to factors like geography and technology that can enable threats. 2) Major cities like New York and New Orleans are especially vulnerable due to their locations and infrastructure. 3) Rapid urbanization and population growth will exacerbate risks in the coming decades as more people and structures are exposed to hazards.
Interconnectedness amongst financial institutions has been implicated as a significant contributing factor to the 2008-09 crisis, where shocks were amplified to becoming systemic events. We study two types of networks: correlation network based on publicly traded bank returns, and a physical network based on interbank lending transactions and discuss various analytic approaches for studying their connectivity patterns over time. Some key findings include: (i) both networks behave similarly pin the period preceding the 2008-09 crisis, (ii) during the crisis the correlation network shows an increase in interconnectedness while the physical network highlights a marked decrease in interconnectedness. Moreover, these networks respond differently to monetary and macroeconomic shocks. Physical networks forecast liquidity problems, while correlation networks forecast financial crises.
The document discusses risk analysis for fires in civil structures. It covers defining the system, hazard identification, probability analysis, consequence analysis, risk estimation, risk evaluation, and risk reduction. Key points include defining the scope and context of the risk assessment, identifying potential hazards and how they may occur, and analyzing the probability and consequences of hazards to estimate risk and determine if risk levels are acceptable or if risk reduction is needed.
This whitepaper discusses next generation financial risk monitoring using a framework called Datashop Alchemy. It summarizes an approach to measuring systemic risk using interconnectedness between financial institutions and their credit ratings. The framework evaluates daily systemic risk scores using this methodology and visualizes the results. It is intended to help central banks, financial institutions, and other industries monitor systemic risk in their networks to identify risks and support decision making.
Capstone Final Draft Rev 2 - The Cyber-Security Dilemma_ The โCyber-Armyโ Bui...James Creamer III
ย
This document provides a summary of a paper analyzing the cyber security dilemma between the United States and China. It begins with an introduction outlining increased cyber attacks and the resulting buildup of cyber capabilities in the US and China. It then provides definitions of key terms and reviews relevant literature on the modern security dilemma with China, US-China relations, and cyber security. The literature discusses factors that can exacerbate or alleviate security dilemmas and different viewpoints on China's rise and the threat it poses. The document aims to determine if the US and China are justified in their reactions or if their actions are contributing to an escalating cyber security dilemma.
Differentiated social risk Rebound dynamics and sustainability performance in...Sandy Worden
ย
This document discusses differentiated social risk and sustainability performance in the mining industry. It argues that the mining industry currently conflates risk to people with risk to projects, without clearly differentiating the two. The document demonstrates the concept of "rebound dynamics", where social risks can generate impacts across institutions and boundaries. It asserts that understanding how social and business risks interact dynamically is important for ensuring the industry addresses social harms as part of its sustainability commitments. The document provides context on social science perspectives of risk, and how these differ from technical approaches used in the mining industry. It also explores how the concept of "social license to operate" has connected sustainability to risk discussions in the industry.
Whose Global Pulse: Diagnosing Sickness or Health?Global Pulse
ย
Presentation by Wim Naudรฉ of UNU-WIDER addressing issues of vulnerability and resilience at the United Nations Global Pulse Data and Analytics Workshop in Tarrytown, USA, 8-10 September 2010.
The document discusses increasing risks from chemical, biological, radiological, and nuclear disasters due to factors like globalization, increased mobility, and infrastructure vulnerabilities. While counterterrorism efforts have strengthened defenses against deliberate attacks, society remains unprepared for unintentional or "behind the lines" threats. A new approach is needed that reallocates resources to train and involve the general population in prevention, response, and building resilience.
The document discusses using an epidemic simulation model called CASMIM (Cellular Automata with Social Mirror Identity Model) to better model real-world epidemics and evaluate public health policies. CASMIM uses a social mirror identity concept where each individual is represented by multiple identities to model their movement and interactions. It was found to generate small-world network structures similar to human social networks and allow sensitivity analysis of factors like population size, individual diversity, and neighborhood type.
This document summarizes a book titled "Measuring Vulnerability to Natural Hazards: Towards Disaster Resilient Societies" edited by Jรถrn Birkmann. The summary discusses key themes of the book, which include the need to clearly define concepts like vulnerability and risk, the complexity of measuring vulnerability, and issues with indicator selection and data availability. Specifically, the book examines different approaches to measuring vulnerability at global, national and local levels. It also explores the use of indicators and models to assess vulnerability, finding that no single model exists due to varying definitions and the multifaceted nature of vulnerability itself.
1) The document discusses systemic risks and emerging future challenges, including issues like complexity, cascading consequences, climate change, and digital insecurity.
2) It argues that participatory democracy and human rights are key to reducing disaster risks but that inequality can undermine efforts if human rights are not upheld.
3) Looking ahead, the document stresses that foresight, planning, and clear communication according to established quality standards will be crucial for success in addressing future disasters and challenges in a rapidly changing world.
WORK & STRESS, 1998, VOL. 12, NO. 3 293-306 Achieving a sa.docxambersalomon88660
ย
WORK & STRESS, 1998, VOL. 12, NO. 3 293-306
Achieving a safe culture: theory and practice
JAMES R E A S O N
Department of Psychology, University of Manchester, Manchester M13 9PL, UK
Keywords: Safety culture; Accidents; Organizational factors; H u m a n error.
This paper discusses four topics relating to safety culture, three theoretical and one practical. The first
considers why it is that an unsafe culture is more likely to be involved in the causation of organizational
rather than individual accidents. It is the pervasive nature of culture that makes it uniquely suitable
for creating and sustaining the co-linear gaps in defences-in-depth through which an accident
trajectory has to pass. The second topic relates to pathological adaptations, and discusses two
examples: the Royal Navy of the mid-nineteenth century and the Chernobyl reactor complex. The
third issue deals with recurrent accident patterns and considers the role of cultural drivers in creating
typical accidents. The final topic is concerned with the practical question of whether a safety culture
can be engineered. It is argued that a safe culture is an informed culture and this, in turn, depends upon
creating an effective reporting culture that is underpinned by a just culture in which the line between
acceptable and unacceptable behaviour is clearly drawn and understood.
1. Introduction
Although there is no universally accepted definition of safety culture, there can be little
doubt that it is a concept whose time has come. Since the beginning of 1997, there have been
well-attended meetings and workshops devoted exclusively to this topic, and the interest
extends across many work domains. For example, the US National Transportation Safety
Boardโs (NTSB) symposium on โ Corporate Culture and Transportation Safety โ in April
1997 attracted some 550 delegates from all of its constituencies : aviation, railroads,
highways, the marine world, pipelines and the safety of hazardous materials. The
symposium was convened because the NTSBโs accident investigators were increasingly
conscious of the crucial role played by cultural factors in creating bad events (see, for
example, NTSB/AAR 1994, 1997, NTSB/RAR 1996).
The high level of concern with organizational culture in the world of hazardous
technologies poses both a challenge and an opportunity for those academics involved in the
safety-related sciences. W e need to develop a clearer theoretical understanding of these
organizational issues to create a principled basis for more effective culture-enhancing
practices. To this end, the paper presents arguments dealing with four culture-related issues,
three largely theoretical and one with more directly practical applications.
First, are modern, high-tech, well-defended technologies-such as nuclear power plants,
chemical process plants and commercial aviation-more vulnerable to the effects of a poor
safety culture than traditional industries involv.
The document discusses supply chain risk. It defines supply chain risk and identifies various types of risks including supply risks, demand risks, and environmental risks. It also discusses strategies for managing supply chain risk such as avoidance, postponement, hedging, control, and risk transfer. Effective supply chain risk management involves understanding risk sources and drivers, identifying critical parts of the supply chain, establishing contingency plans, and working collaboratively with suppliers and customers.
This document discusses managing risk in complex project environments. It begins by explaining that projects exist within complex financial, environmental, technological and political systems. It then discusses reframing how we view reality and risk when dealing with complexity and ambiguity. It also explains the duality of risk in terms of reward and regret from different stakeholder perspectives. The document then provides methods for managing risk, such as assumptions analysis and understanding interdependencies between risks. It advocates adapting project management approaches to account for complexity rather than relying only on past trends and data from less complex environments.
This document discusses cascading disasters and critical infrastructure. It begins with an overview of cascading disasters as events with primary impacts that lead to secondary impacts through interconnected vulnerabilities and escalation points. The document then discusses critical infrastructure and how the failure of critical systems like power, water, and communications can cascade and impact other sectors. It emphasizes that cascading disasters involve long chains of consequences and that risk analysis should consider escalation points and worst-case scenarios. The goal is to understand these complex events in order to enhance resilience and protection of critical infrastructure.
Financial Network Analysis and Visualisation - Seminar at NYU/Stern 5 April 2011Kimmo Soramaki
ย
This document provides a summary of a presentation on financial network analysis and visualization. It discusses growing interest in analyzing networks in economics and finance to better understand systemic risk. Network theory views financial entities as interconnected through balance sheets rather than being isolated nodes. Measuring the centrality of nodes in payment networks and lending markets can help identify systemically important financial institutions. The presentation promotes a new open source software tool called Financial Network Analysis that integrates data analysis, network visualization, and modeling to advance the study of systemic risk and contagion in financial networks.
Similar to Stability of the world trade web over time (20)
Financial Network Analysis and Visualisation - Seminar at NYU/Stern 5 April 2011
ย
Stability of the world trade web over time
1. Stability of the World Trade
Web over time.
Scott Pauls
Department of Mathematics
Dartmouth College
Conference on Emergent Risk,
Princeton University
September 28-29,2012
2. Stability of the World Trade
Web over time.
Scott Pauls
Department of Mathematics
Dartmouth College
Conference on Emergent Risk,
Princeton University
September 28-29,2012
3. Systemic and emergent risk
โWhereas systemic risk is the threat that
individual failures or accidents
represent to a system through the
process of contagion, emergent risk is
the threat to the individual parts
produced by their participation in and
interaction with the system itself.โ
(Centeno and Tham)
Conference on Emergent Risk,
Princeton University
September 28-29,2012
4. Stability and robustness
Structure
We use network models:
actors are nodes, relationships are edges.
Dynamics
We construct dynamics to model
exchanges between the actors.
Robustness
We define robustness in terms of
responses to shocks.
Conference on Emergent Risk,
Princeton University
September 28-29,2012
5. World Trade Web
nodes are countries.
edges are directed and
weighted, giving the
dollars that flow from
country i to country j
for traded goods.
dynamics are given by
the Income-Expenditure
model.
Barbieri, Katherine, Omar M. G. Keshk, and Brian Pollins. 2009. โTRADING DATA: Evaluating our
Assumptions and Coding Rules.โ Conflict Management and Peace Science. 26(5): 471-491.
Conference on Emergent Risk,
Princeton University
September 28-29,2012
6. Income-Expenditure model
propensity to spend
debt
Markov model
Conference on Emergent Risk,
Princeton University
September 28-29,2012
7. Attacks on the system
Edge deformation: policy decisions, sharp trade
evolution.
Bilateral edge deletion: war, collapse of trade
agreement.
Node deformation: internal collapse (e.g. bhat
collapse in the 1980s)
Node deletion: unrealistic but useful as a type of worst
case scenario
Maximal Extinction Analysis (MEA): really a worst case
scenario!
Conference on Emergent Risk,
Princeton University
September 28-29,2012
8. Power and robustness
Income after
rebalancing
Total initial income
Conference on Emergent Risk,
Princeton University
September 28-29,2012
9. WTWs are
โrobust yet fragileโ
Left hand side:
TARGETED ATTACK
The strength of maximal
attacks of each type.
Colored bars (and circles)
indicate significance.
Right hand side:
RANDOM ATTACK
Circles indicate the
proportion of all possible
attacks which are not
significant.
Conference on Emergent Risk,
Princeton University
September 28-29,2012
10. The role of connectance
Conference on Emergent Risk,
Princeton University
September 28-29,2012
11. The role of connectance
Conference on Emergent Risk,
Princeton University
September 28-29,2012
12. A closer look
U.S./Canada
link
U.S.
deformation
Conference on Emergent Risk,
Princeton University
September 28-29,2012
13. Conclusions and the big picture
We see evidence that increased connectance has two effects related to
systemic risk.
1. On one hand, denser connections allow for more paths through
which shocks may be mitigated.
2. But, on the other, denser connection patterns provide more paths
along which collapse can spread.
These two are in tension.
With regard to emergent risk, we see an additional wrinkle related to
connectance coupled with the topology of the network.
3. Denser connections allow for propagation of shocks which, while
possibly mitigated overall, can have adverse impact on individual
countries.
Conference on Emergent Risk,
Princeton University
September 28-29,2012
14. Emergent and Systemic risk
In our model, the tension is resolved in different ways depending on the size of the
shock.
Systemic risk
a. Smaller shocks are easily absorbed into the system (and sometimes result in
income increases!).
b. But, there is a tipping point above which the larger shocks spark a substantial
contagion effect.
Emergent Risk
c. Even with smaller shocks, we see evidence that mere participation in the WTW
brings new risk.
d. Large shocks amplify this risk.
We need a new lexicon to describe these types of networks.
Conference on Emergent Risk,
Princeton University
September 28-29,2012
Editor's Notes
This is from the proposal describing the conference. In the work Iโll describe, our system is a network of trade relationships โ measurements of the import/export business that countries do with one another. In that context, we are concerned with both of these types of risk and, in many ways, view them as aspects of a broader measure of risk inherent to the system. Robust participation in trade has obvious benefits in terms of income, availability of goods, mobility, etc. But that same participation creates vulnerability. Distant, and perhaps small, economic events can have disproportionate effects on other members of the trade network, even those not directly impacted by the event. So, in our work, emergent risk (as defined here) has a component of simple exposure to systemic risk but also a component of risk associated to the pattern of interactions across the network. We consider this in the context of globalization, which both pushes countries into the trade network and encourages them to trade more widely. This has structural consequences for the WTW. To what extent does this impact the risk (whether emergent or systemic) of the system?
So, how do we assess these types of risk โ our paradigm rests on the analysis of the response of the network to shocks.Given a (well defined) shock to the system, how does the system respond? What is the functional damage to the network?The interaction of the dynamics and the network topology are crucial.Earlier work in this direction: percolation, contagion, robust-yet-fragile categorization of router networks.
The method we use is based on extinction analyses in ecology, primarily those done on food webs. Basic result โ increasing connectance (i.e. network density) corresponds to increasing robustness.
Our adjacency matrix is denoted by M - we use the import matrices from the Correlates of War project. ๐๐๐ is the $ amount of imports into country i from country j.Our adjacency matrix is denoted by M - we use the import matrices from the Correlates of War project. ๐_๐๐ is the $ amount of imports into country i from country j.
In strength = $ of income from selling goods, Out strength = $ expended buying goods from others๐ผ is the percentage of income that you will spend,๐ฝ is money spend over and above the income๐ is the Markov chain associated withM. If everything is computed from a fixed data matrix, then ๐ธ๐ก is constant over time.In strength = $ of income from selling goods, Out strength = $ expended buying goods from others๐ผ is the percentage of income that you will spend,๐ฝ is money spend over and above the income๐ is the Markov chain associated withM. If everything is computed from a fixed data matrix, then ๐ธ_๐ก is constant over time.
MEA: delete node of highest power, rebalance and repeat until 50% of the income has been removed.
Power measures the strength of a given attack. Suppose an attack changes in total $ from 100,000 to 90,000. Then Power = 1-90000/100000=1-9/10=1/10.Robustness takes the maximum power over all attacks of a given type. Using 1-Power transforms this into a number which is low if power is high and vice versa.
Take-away: for all attacks, targeted attacks are usually significant (i.e. the damage spreads) and for all but node deformations, random attacks are generally not significant. Hence RYF. But there is some nuance, some years buck this trend and node deformations show fragility for both types of attacks.
For the smaller shocks, we see a similar trend to the food web results โ as connectance increases, we see increased robustness as well. But, for the edge shocks, there seems to be a decay after a critical juncture at roughly 0.4.The weakest result is (again) for the node deformation.
However, in the face of the maximal extinction analysis we see a different trend โ increasing connectance corresponds to decreasing robustness.Notes:There is a structural transition in the 1970s which causes a temporary jump in robustness.the jagged black line is the mean robustness over a family of bootstrap null models. We gauge the significance of the results in terms of different null models. The black circles here are years when ๐ ๐๐ธ๐ด is outside of the 5-95% range for the same statistic over 100 bootstrap nulls.However, in the face of the maximal extinction analysis we see a different trend โ increasing connectance corresponds to decreasing robustness.Notes:There is a structural transition in the 1970s which causes a temporary jump in robustness.the jagged black line is the mean robustness over a family of bootstrap null models. We gauge the significance of the results in terms of different null models. The black circles here are years when ๐ _๐๐ธ๐ด is outside of the 5-95% range for the same statistic over 100 bootstrap nulls.
Impact ratio = โ๐ธ5โโ๐ธ0๐ก๐๐ก๐๐ย ๐๐๐๐ย ๐ค๐๐๐h๐ก (RHS)Impact ratio = ๐ธ5(๐)๐ธ0(๐) (LHS)Bilateral link deletion: (a) 75% of the attacks do less damage than their edge weight (and some, the negative ones), create more income. 25% of the attacks do more damage. (b) 2006, US/Can is largest impact link, so we look at it closely. These are the same ratios, but country by country after US/CAN is deleted. They are ordered, from smallest to largest, by the mean network distance between the country and the US and Canada. Note that there is little association between these two. This is one indication of emergent risk. No matter how far you are from the epicenter of a crisis, you can have substantial risk just from your participation and the pattern of network interactions in the global network.Node deformation:Different picture, percentages flipped โ 25% do less damage, 75% do more. Now, geographical association is more apparent. Impact ratio = (โ๐ธ_5โโ๐ธ_0)/(๐ก๐๐ก๐๐ ๐๐๐๐ ๐ค๐๐๐โ๐ก) (RHS)Impact ratio = (๐ธ_5 (๐))/(๐ธ_0 (๐)) (LHS)Bilateral link deletion: (a) 75% of the attacks do less damage than their edge weight (and some, the negative ones), create more income. 25% of the attacks do more damage. (b) 2006, US/Can is largest impact link, so we look at it closely. These are the same ratios, but country by country after US/CAN is deleted. They are ordered, from smallest to largest, by the mean network distance between the country and the US and Canada. Note that there is little association between these two. This is one indication of emergent risk. No matter how far you are from the epicenter of a crisis, you can have substantial risk just from your participation and the pattern of network interactions in the global network.Node deformation:Different picture, percentages flipped โ 25% do less damage, 75% do more. Now, geographical association is more apparent.
On b): Substantial questions here โ is the tipping point so large that we should never expect shocks of that magnitude (i.e. โtoo big to failโ)? Do we really have a framework in which to properly evaluate this question? (see, 2008 financial crisis)